Balfour Beatty and Costain have got the go-ahead to start work on infrastructure for a huge carbon capture project in the North East.
The £4bn construction work on two sites at Net Zero Teesside Power (NZT Power) will start in mid-2025, with both contractors helping to deliver the world’s first gas-fired power station with carbon capture and storage.
They will also be involved in construction transportation and storage infrastructure for three carbon capture projects in Teesside.
In March, Balfour Beatty was named as the construction partner on the onshore power, capture and compression contract package, while Costain became contractor on the onshore carbon dioxide-gathering system and gas-connection package (see the full list of contractors below).
They have now received a Notice to Proceed from NZT Power, which authorises construction work to start.
The site is expected to start operating in 2028. The government said the project will directly support 2,000 jobs in the North East, and “tens of thousands more” across the UK in the coming years.
NZT Power is a joint venture made up of British oil and gas company BP and Norwegian energy firm Equinor.
Prime minister Keir Starmer said on Tuesday (10 December) that the industrial heartlands had been held back by instability and low growth “for far too long”.
“Today’s investment is proof that this government is taking a different approach by putting growth first and investing in the industries of the future,” he added.
Balfour Beatty chief executive Leo Quinn said the project “underpin[s] the UK’s transition to cleaner and greener energy consumption and [will] drive regional economic growth in North East England”.
Costain chief executive Alex Vaughan said transitioning energy to renewables is a “vital part of the UK’s move to net zero”.
“Our strategy is focused on shaping, creating and delivering critical pieces of national infrastructure like this one,” he added.
Energy secretary Ed Miliband said the investment plan “launches a new era for clean energy in Britain”.
“[NZT Power will] boost energy security, back industries, and support thousands of highly skilled jobs in Teesside and the North East,” he added.
The UK Government has previously committed to reaching net zero by 2050.
The government said its development plans will help remove more than 8.5 million tonnes of carbon emissions each year – equivalent to taking around four million cars off the road.
Recent governments have come under sustained pressure to bring CCS facilities on board, with the Climate Change Committee warning in 2019 that it was “a necessity not an option”.
The Labour Party’s pre-election manifesto pledged to prioritise net-zero technology and infrastructure, including plans for a £1bn fund for carbon capture deployment. It also pledged to create a National Wealth Fund aimed at funding clean energy, promising £7.3bn of public funding and private money on top of that.
| Contract awarded (worth £4bn overall) | Contractors |
| Onshore power, capture and compression | Technip Energies and GE Vernova consortium,including Balfour Beatty as the construction partner and Shell as the technology licensor |
| Onshore CO2-gathering system and gas connection | Costain |
| Linepipe: onshore and offshore | Marubeni-Itochu Tubulars Europe Plc with Liberty Steel Hartlepool, Corinth Pipeworks and Eisenbau Kramer as the nominated pipe-mills |
| Offshore pipeline, landfalls, onshore outlet facilities and water outfall | Saipem |
| Offshore subsea injection system | TechnipFMC |
| Power and communications cable | Alcatel Submarine Networks |
| Offshore systems engineering | Genesis |
| Integrated project-management team | Wood |
